Benzinga | Apr 16, 2021 10:01AM EDT

Aphria One Step Closer To Merging With Tilray, Shareholders Overwhelmingly Approve The Deal

Aphria Inc. (TSX:APHA) (NASDAQ:APHA) confirmed Thursday it has satisfied one of the requirements for its merger with Tilray Inc. (NASDAQ:TLRY) after its shareholders approved the arrangement at a special meeting.

The special resolution approving the arrangement had to be endorsed by a minimum of two-thirds (66.6%) of the votes cast at the meeting. The merger got a 99.38% approval rate.

The Deal

Under the agreement, Aphria shareholders will obtain 0.8381 of a Tilray class 2 share for each Aphria share owned. Tilray shareholders keep their Tilray shares with no changes in ratios.

The merger was first announced back in December, when it was projected it would form the world's largest company based on pro forma revenue. The deal was also praised by Cantor Fitzgerald's analyst Pablo Zuanic, who said that it "makes sense" and that the Canadian cannabis sectors could use consolidation moves to help its oversupply issues.

The resulting company would keep the Tilray name and place Irwin Simon, Aphria's CEO, as Chief Executive Officer.

See also: How to Buy Aphria Inc. (APHA) Stock

"I want to thank all Aphria Shareholders for voting and approving the Arrangement. We appreciate their support, as we believe the business combination will create a Combined Company with a strong financial profile, low-cost production, market share leading brands, distribution network and unique partnerships," Simon stated. "The Combined Company will be increasingly well-positioned to deliver a sustainable attractive return for our combined shareholder base."

The closing of the deal still awaits customary conditions, such as court authorization and the approval of Tilray stockholders.

On Monday, Aphria shared its third-quarter earnings, reporting net revenue of CA$153.6 million ($122.5 million), up by 6.4% year-over-year, and sequentially down by 4.3%.

The company also posted positive adjusted EBITDA of CA$12.7 million, representing the eighth consecutive quarter of positive EBITDA.

Shares of Aphria traded down 1.6% at the time of the publication of this article.